Wall Street gains on reassuring earnings, data

By IBT Staff Reporter On 04/24/09 AT 10:48 AM

Stocks rose on Friday on better-than-expected results from companies including American Express and Ford as reassuring data on manufacturing and housing boosted hopes the recession is showing signs of abating.

Struggling automaker Ford Motor Co was among the bright spots in a busy week for earnings reports, saying Friday it was on track to at least break even in 2011, while credit card company American Express Co said Thursday results beat expectations as it slashed costs.

Energy shares also gave a boost as the price of oil rose above $51 a barrel. Chevron was among the Dow's biggest lifts, up 2.2 percent to $66.98.

Government data showed durable goods orders slipped in March, but fell far less than Wall Street expected. Sales of new single-family homes dropped, but inventories plummeted at a record pace.

Investors are keen for further signs the recession may be moderating to build on the optimism that spurred the recent rally from early March.

The earnings news last night as well as this morning in general appears to be relatively positive and, at the core, the durable goods orders this morning also provided further indication that the manufacturing sector is showing tentative signs of improvement, said Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut.

The Dow Jones industrial average rose 72.64 points, or 0.91 percent, to 8,029.70. The Standard & Poor's 500 Index gained 7.97 points, or 0.94 percent, to 859.89. The Nasdaq Composite Index was up 19.67 points, or 1.19 percent, at 1,671.88.

A concept paper on the government stress tests for the 19 biggest U.S. financial institutions is set to be released at 2 p.m. EDT, according to a source familiar with the process.

The paper will describe regulators' evaluation of how the institutions would fare if the economy took an even sharper turn for the worse. The KBW Bank index was off nearly 1 percent.

Software giant Microsoft Corp was among the biggest lifts on the Nasdaq, up 7 percent at $20.24, after reporting Thursday that its profit fell but investors cheered efforts to cut costs and that the release of its Windows 7 operating system was on track.

Ford, mired in the deep auto sector downturn, posted a smaller-than-expected loss and said it did not expect to seek government loans. Ford also said it burned through less cash that it did in the second half of last year, sending its shares up more than 15.4 percent to $5.18.

American Express was the Dow's biggest boost, up 12.6 percent at $23.61.

But the latest earnings reports still showed the pressures of the global economic slump, with diversified manufacturers Honeywell International Inc and 3M Co cutting their full-year profit forecasts.

The S&P 500 index is off more than 1 percent for the week and if it ends the week lower, it will snap a six-week streak of gains. Since the bear market lows of early March, the index is up about 27 percent.

Exclusive articles delivered to your inbox daily.

A year and a half after the Panama Papers leak hit headlines across the globe, the country's finance minister sat down with IBT to discuss what his department has been doing since then to clean up Panama's reputation on the world stage and keep the use of secretive tax havens in check.